The National Bank of Georgia (NBG) has significantly updated the rules for imposing monetary fines and sanctions on Virtual Asset Service Providers (VASPs) and their administrators (Decree No. 204/04).
The changes are already in effect.
The new regulations clearly define both fixed fines and fines imposed per individual infraction:
📌 Key Financial Sanctions:
▪️ Carrying out activities in violation of the service scheme agreed with the National Bank — 20,000 GEL; ▪️ Lack of a software system or violation of relevant system requirements — 20,000 GEL; ▪️ Failure to submit requested information/documentation prior to the completion of an inspection — 7,000 GEL (per instance); ▪️ Failure to comply with a written request/instruction of the NBG within the set timeframe — 5,000 GEL (per instance); ▪️ Failure to submit information regarding changes within the established deadline — 5,000 GEL;
⚖️ AML/CFT Requirements Are Also Tightened:
· Lack of an automated system for detecting suspicious/related transactions, or malfunctioning thereof — 20,000 GEL; · Failure to record a client and/or transactions in the dedicated system — 10,000 GEL (per instance);
👤 Administrator Liability:
Liability is not limited to the VASP alone. In relevant cases, an administrator may be fined 5,000 GEL, with the fine doubling for repeated violations.
⚠️ Sanctions Are Not Limited to Monetary Fines:
Depending on the severity of the violation, the NBG may apply additional measures: · Restriction of operations; · Prohibition of profit and dividend distribution; · Suspension/dismissal of an administrator from office; · In extreme cases: revocation of the VASP's registration.
💡 What Does This Mean for the Sector?
Against the backdrop of the updated regime, the following become critically important: 1️⃣ Preliminary assessment of compliance systems and internal processes (Gap Analysis); 2️⃣ Timely remediation of existing deficiencies; 3️⃣ Proper documentation of communication with the National Bank and strict adherence to deadlines.